National Australia Bank (NAB) has moved decisively in the mortgage market, cutting its fixed home loan interest rates by as much as 0.55 percentage points this week.
The timing is notable—just a day after NAB’s economics team forecast a supersized 0.50% cash rate cut from the Reserve Bank (RBA) in May.
The move means NAB now offers the lowest fixed rates across all Big Four banks, with a standout rate of 5.39% for a three-year fixed loan for owner-occupiers with a loan-to-value ratio (LVR) of 70% or less, Yahoo Finance reported.
Sally Tindall (pictured), Canstar’s data insights director, praised NAB’s strategy.
“The bank is aiming to attract borrowers looking to lock in now by offering up competitive rates as low as 5.39%—the sharpest among the big four banks.”
According to NAB’s updated forecast, the central bank is expected to reduce the official cash rate by a total of 1.50% over the coming year. The bank’s outlook includes a 50bps cut in May, followed by 25bps reductions in July, August, November, and February, bringing the cash rate down from 4.1% to 2.60%.
“Our call for a 50 basis points easing in May reflects the fact that with the real cash rate of 1.3 per cent and policy currently restrictive, the RBA needs to play catch up,” said Sally Auld, NAB chief economist.
“Once the cash rate reaches a level more consistent with a neutral policy setting, we then expect the RBA to pause for a few months before taking the cash rate into modestly accommodative territory.”
The prediction follows intense global market shifts, including US President Donald Trump’s partial 90-day tariff freeze. While tariffs were suspended on some imports, China remains subject to a punitive 145% rate—an uncertainty that continues to unsettle markets.
In contrast to NAB’s aggressive rate cuts, Suncorp has moved in the opposite direction, raising some variable rates by two basis points, Savings.com.au reported.
For eligible borrowers, its Back to Basics Better Together loan now starts at 5.90%, though that rate only applies to LVRs of 60% or less.
Meanwhile, other lenders like Australian Mutual Bank and Northern Inland Credit Union are offering even lower fixed rates than the big four, with two- and three-year terms starting at 5.29%.
With the RBA tipped to enter a rate-cutting cycle, borrowers may be questioning whether now is the right time to lock in a fixed rate, Yahoo Finance reported.
“If you are weighing up between fixed and variable, know that the future of the cash rate is highly uncertain,” Tindall said.
She cautioned that while economists predict rapid easing due to global headwinds.
“The RBA governor isn’t so certain, saying it’s ‘too early’ for the board to know the path for the cash rate,” Tindall said.
“These new fixed rates are unlikely to lead to a stampede of people rushing to lock in their rate,” especially as the average owner-occupier variable rate could fall to 4.56% if NAB’s forecasts come true—well below its current lowest fixed rate.
All four major banks now predict rate cuts beginning in May, though their projections vary slightly:
Whether NAB’s bold forecast proves correct remains to be seen. But its swift move on fixed rates signals a strong belief that RBA will soon take action—and borrowers may want to weigh their options carefully as the rate cycle shifts.
